The FOMC starts its 2-day policy meeting tomorrow and will announce its rate policy decision on Wednesday at 2pm ET. Fed Funds Futures are implying 0% probability of any rate adjustment at this week’s meeting and low probability (23%) of a hike at the December meeting. Even though Wednesday’s outcome appears to be a foregone conclusion, markets will likely trade in traditional narrow pre-announcement ranges.
The dollar is lower vs. most of its G10 peers, the widest losses against the AUD (-0.57%) and NOK (-0.53%). The dollar is also lower against emerging market pairs: -0.69% vs. BRL and -0.55% vs. MXN, continuing the shift to more risky assets started late last week.
Treasury prices are lower in all tenors (lifting yields), the biggest declines centered in the near dates, and the 3-year price leading the way lower -0.066%. The benchmark 10-year yield is currently 4.90%, mid-way between its 4.80% – 5.00% two-week range.
Most global equity indexes are higher today. The S&P 500 is +0.76%, lifting it out of correction territory (defined as a 10% decline from its most recent peak). The Nasdaq 100 Index is leading all indexes with a 1.53% gain.
Gold has had a bullish month, gaining +8.09% at $1,997.89 after closing Friday at $2,005.78/oz.